Silver Shortage Update: Another Delay From Apmex

There has to be a big problem in the financial system coming that the Fed knows about but we can’t see it yet. Why? The behavior of the Fed and its ECB/BOE cohorts with respect to the paper gold/silver market conveys a sense of terror on their part.

We learned yesterday from an “official” source, Reuters believe it or not (Reuters has furiously been spreading anti-gold propaganda ), that India is on track to import 900-1000 tonnes of gold this year. This does not take into account smuggled gold which is estimated to be another 25%. India alone, it seems, will inhale 50% of the amount of gold produced in a year.

Then there’s China…China it’s hard to say for sure. If you go by Hong Kong exports into China, it only captures a portion of China’s gold demand. If you go by Shanghai Gold Exchange Withdrawals, China is on track to scoop up over 2000 tonnes of gold this year.

China + India combined are going to import at least 30% more than the total amount of gold produced in a year. Both India and China are entering their seasonally strongest period of gold buying, which will last through the end of the year.

Then there’s silver. By all apparent market indications, there is a serious shortage of silver that has developed, at least at the retail level. Although charlatans from down under who avoided taking economics in undergrad seem to think the 1000 oz Comex bar market is the bellweather, I would like to see a bona fide independent audit of the inventory reportedly being held in Comex vaults. Note: those reports are prepared by the banks – do you trust them?

Premiums on silver products in the U.S. have widened to levels not seen since 2008, when silver eagle premiums approached 100%. Currently, my “bellweather” indicator is Apmex. The premiums on 500 oz monster boxes have widened today to $3.79 over spot. This is the lowest premium product and it’s 27% over spot. If you want to buy just one mint roll of 20, you will have to pay $5.75 over spot, or a 41% premium.

But it’s worse, certain products are not available. We know 90% bags of coins are not available, although they can be had in onesies and twosies for about $7 over spot. But a friend of mine ordered a 100 unit gold gram product from Apmex and was notified this morning that there is “a delay in processing” his order. In the past he said shipment was immediate. This particular product is minted by Valcombi and is a “tear away” sheet of 100, 1 gram units. It’s perfect for preppers who seek fungability. And now there’s a shortage of them…

Base on all the evidence from the physical market – and there’s a lot more evidence of shortages in silver – how do we explain the behavior of the price of gold and in the paper market? Here’s two graphs of the trading in paper gold and silver – click to enlarge:

GOLD: SILVER:

This type of price action that can only occur by the exertion of an exogenous outside force. In this case it’s the western Central Banks and, specifically, the NY Fed in conjunction with the Treasury’s Working Group on Financial Markets’ Exchange Stabilization Fund. The decline in the price of gold and silver nearly every night for the past four years seems to occur primarily only in the NY/London paper markets.

Certainly everyone by now knows that the Plunge Protection Team is working overtime to keep the U.S. stock market from collapsing. And it is also exerting at least as much effort, and probably more, in keeping the price of gold and silver from exploding.

For now, the banks are finding enough physical gold and silver to keep the Indians and Chinese happy. My best guess is that the GLD, SLV, and the Comex and LBMA custodial vaults are being looted for this purpose. The U.S. retail market is another matter – it’s mind over matter: the Fed doesn’t mind and they don’t matter – for now.

But this will become problematic once those sources are tapped. If you think you have bars being kept in the non-bank vaults on Comex (Brinks, CNT, Delaware Depository and Manfra, Tordella) I would suggest paying a personal visit and verify serial numbers. And then leave with your bars in hand.

If you are looking to buy silver from a big U.S. internet-based dealer in order to minimize the premium you pay, I would suggest instead taking your fiat cash and buying from a local dealer. At least you can guarantee that you will have the product in hand when you tender payment. Otherwise you risk seeing this in your email tomorrow:

Thank for your recent order xxxxxxxx. While processing your order, we encountered a short delay. APMEX strives to ship every order as quickly as possible, but in rare cases order processing may take longer than expected. (Apmex)

25 thoughts on “Silver Shortage Update: Another Delay From Apmex”

Interesting comments on gold and the perceived amount of gold that India might purchase.

Personally, I’m more interested in the moving of the gold then the having of the gold. Like any currency, the true value is in the movement and the greasing of the economic wheels …. debt-free, in this case.

Silver has a great deal more utility than gold and gets consumed more , which is why gold is now better suited to a monetary role, IMO. The more a monetary metal can rely strictly on the intrinsic value tied to economic activity (in its creation), the better.

BOTH will do quite well, thank you very much! Either of these metals 1) in Phyzz form, and 2) in your possession outside of the banking system (for those of you in Sheridan, AR – that means no deposit boxes!), and you’ll sleep good at night.

I’m quite a silver bug myself, stacking for a while. I’ve warned as many on ZH who will listen, especially those who wait for cheaper prices, that delays have been occurring for at least a month now. My most recent 100 Oz was bought from a dealer direct as I would have waited 20 days to have gotten it from the Brinks vault from my favorite dealer, and that’s if the doo-doo didn’t hit the fan first.

Finally, to any critics who claim silver can’t do as well. Even if production demand is down, if there’s not enough gold, then that leaves enough silver to add to investment demand. I still see this glass more full than some give credit.

The reason they are smashing the crap out of gold and silver is because Citibank is naked short 3 Billion ounces of silver, which all comes due within the next 90 days. They are trying their damndest to get the long to capitulate or roll to another month and cover their shorts. I suspect they are also trying to transfer their short position to no-name shell companies (Hedge Funds). This is why hedge funds are net short for the first time ever.

This Hairy Guy is hanging on to the rope around the Silver Bull and has his hat pulled down tight and ready to spur the livin’ …. you get the rest. This will be a FUN ride and if what you say is correct, the gigantic SQUEEZE will be epic!

Dave, look at the Platinum and Palladium OI and Inventory figures. It is even more laughable than gold and silver.

Platinum – Open interest of 115 tons, of which 103 tons are due within 90 days against a dealer inventory of only 1.6 freaking tons!!!

Palladium – Open interest of 96 tons, of which 96 tons are due within 90 days against a dealer inventory of only 1.3 freaking tons!!!!

Are you kidding me, they don’t even have 2 tons of this stuff??!!, yet they trade in volumes of tens of tons per day!!!

These markets are 100% make believe.

Funny how they even quote Rhodium on Kitco. I challenge anyone to even find one ounce of the stuff right now, yet kitco quotes a price as if there is some sort of free market. Hahahahahaah!!!! What a joke!

You have to check by the hour now at APMEX. Eagles are now $3.99 over after going up to $3.79 this morning. BTW the RCM bars are now $1.49 over, but they only have 8 left — they went through about 100 of them today. APMEX is getting cleaned out of everything silver although they did get in a few small bags of 90% and they are selling even at $7.49 over spot (50+% over spot).

Wow! You are right!!! There are zero 100 oz. bars at APMEX. This morning there were 144 left! For the past year or so, I have been tracking APMEX stock of certain items regularly and have never seen that kind of rapid drawdown of those bars.

ASE’s have jumped to a $4.29 premium today and they are selling them like crazy. They may get close to running dry before next weeks allocation from the mint. Gold Eagles are selling fast too. While watching the inventory today it just dropped over 500 oz — somebody bought a monster box of gold eagles! It’s starting to look like 2008. Don’t know if you were watching APMEX back then but they had their 12 days of Christmas sale and had ASE’s and the then blow-out price of $3.49 over spot — sold out their whole stock of 200,000 oz in 24 hours.

Hi folks. Interesting and timely article. On Monday the 24th, I ordered a dozen 1/2 ounce silver rounds from APMEX in the normal manner; by personal check. My order totaled $117.48: ($9.79 x 12 = $117.48) Free shipping. The normal process is for them to hold the order until payment is received in the mail, then another 7 business days till shipment via USPS.

Obviously, that translates to $19.58 per ounce. I like to have some fractional amounts on hand, and it has been up to now, very easy to buy some from time to time, especially when the Fed is suppressing the price. As of today, they still have not yet received my check. I expect them to get it tomorrow. If I hear from them that they have ‘encountered a short delay’, I’ll report back.

Dave Was that silver pundit from ‘down under’ Bron Suchecki? Your statement adds some weight to my thoughts that Bron might be talking from a different playbook at this time
We bantered a bit on Silver Doctors 2 weeks ago. He’s convinced that 1000 oz silver bars are the big deal. He also reports that he sources from the London vaults, thinking supply is assured. But in his conversation there was a hint of doubt. RCM is having more than a little trouble sourcing silver too. Me thinks the Queen has something to say about this. Maybe the silverware supplies are getting a little thin.
When mints start shutting down we will have some solid proof of supply problems

One more piece of empirical evidence to add to the article…my local coin dealer said there is a 2-2 1/2 wait for silver eagles with premiums @ Spot+4.00. Think about what happen when there is a loss of confidence in the system…there will no bid.